Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael
Neil Carmichael (Stroud) (Con)
T6. In contrast to the gloomy outlook from the Labour party, could we have an update on progress on improving access to and the availability of large-scale solar panels on commercial and industrial properties?
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael(10 years, 10 months ago)
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Mr Davey
Price controls were taken off this sector in 2002, so Ofgem does not have the power to control prices. Hon. Members should remind themselves that it was the Labour party that took the price controls off. We want to ensure that the regulatory framework and the policies are correct. That is one of the reasons we are pushing the policies that we have adopted. It is also interesting to remind colleagues of the record of the Labour party and its leader. When he was doing my job in 2009, the right hon. Gentleman talked about reforming Ofgem, saying that
“the regulator needs stronger powers to deal with abuse, and the Bill will specifically act to prevent the exploitation of market power by energy generators.”—[Official Report, 24 November 2009; Vol. 501, c. 412.]
What went wrong with Labour’s plans when it was in government?
Neil Carmichael (Stroud) (Con)
If we are to improve the energy markets, we must also increase capacity, as this Government have rightly noted. Does the Secretary of State welcome the fact that my local enterprise partnership is launching a plan for a skills centre in Berkeley, so that we will have the skills to deliver the extra capacity that we need?
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael(10 years, 11 months ago)
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Mr Davey
I am grateful to the hon. Lady for the question, and that is one of the reasons why, in developing the fuel poverty strategy, we are working across Government. She is right to say some health conditions may require people to be at home for longer, and they may not be of pensionable age and getting the winter fuel allowance. I hope we can look at that issue during the finalisation of the fuel poverty strategy.
Neil Carmichael (Stroud) (Con)
With Angela Merkel’s forthcoming speech to both Houses of Parliament in mind, does the Secretary of State agree that it would be very wise and sensible to incorporate energy more thoroughly into the single market, and what steps is he taking to bring that about?
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael(11 years, 2 months ago)
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Mr Davey
A scheme that has already led to 100,000 assessments and a huge number of very good satisfaction ratings from people acting on those surveys is a success. When the Labour party talks down the green deal, let us remember what it is doing: it is talking down reductions in carbon emissions and action on fuel poverty. It should be ashamed.
Neil Carmichael (Stroud) (Con)
Does the Secretary of State agree that one of this Government’s many achievements has been to create an economic framework for innovative firms to start developing new ways in technology to improve our green performance so that our green economy is alive and well, generating jobs and producing good results on CO2 reduction?
Mr Davey
My hon. Friend is absolutely right. It is not just my Department that has been involved in investing in research and development and technological innovation, vital though that is in our area. My right hon. Friend the Secretary of State for Business, Innovation and Skills has ensured investment in ultra-low emission vehicles. My right hon. Friend the Secretary of State for Transport is investing in the railways in a way that has not happened since the Victorians. We have a very proud record of investment, both in infrastructure and in innovation and technical development.
Energy Price Freeze
Debate between Ed Davey and Neil Carmichael(11 years, 2 months ago)
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Mr Davey
No, I will not give way. I want to explain to the House why the document is so important, and why Ofgem’s policies, which the Government support—we have put reserve powers in the Energy Bill to push them through—are so important for competition and pushing prices down for consumers.
Independent generators need to know who will buy their electricity. The right hon. Lady is right that the big six can sell it to themselves, but independent generators cannot do so—they must sell it to someone else. That is a big risk for the independent generators, and they need to be able to cover it. Primarily, they do so at the moment through purchase power agreements or through bilateral trades, which are used mainly when selling to businesses. However, they say that they cannot guarantee those, so they must spend more, and that their capital costs increase because of those risks.
Independent generators face another risk. The question is not only whether they can sell energy, but whether they can buy it. If they have a contractual power purchase agreement and their generation capacity is not working for a particular month and they are unable to supply, they fail their contract. To be able to enter more contracts and expand their businesses, they therefore need to know that they can buy energy in the wholesale markets if their generating capacity is not working.
It is therefore essential that we have a liquid market for four months, six months and 24 months ahead. Guess what? The previous Government did nothing to enable that competition in generating markets. Interestingly, the policies the Opposition have proposed today will also do nothing about the real problem. The description that the right hon. Lady gave of her policies proves that point. If she had read the document, she would have seen on page 8 the analysis by Ofgem—working on all the contributions from the independent suppliers and all the people in the industry—is that the problem she has identified is no longer a problem. It has marked that problem “green”. The problems that we have identified, which we and Ofgem are fixing, are all marked “red”. She really needs to do her homework. There is no point the official Opposition coming to this House with ill-thought-through policies that will not work. Our policies will work for the consumer, push competition into the market and get prices down.
Neil Carmichael
Does my right hon. Friend agree that it is slightly surprising that the Opposition know so little about the big six, when one of their number—a shadow Minister in the other place—was actually director of government affairs for SSE? How does that stack up?
Annual Energy Statement
Debate between Ed Davey and Neil Carmichael(11 years, 3 months ago)
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Mr Davey
Ofgem’s retail market review looked at different approaches to standing charges, and there is a debate on them. However, there is a danger that taking them away will lead to a single unit price model—which some people think is better—that will hit low-income households that are high energy users. We therefore need to consider the full distributional consequences. We will keep these matters under review, as we should.
Neil Carmichael (Stroud) (Con)
Increasing capacity is definitely the key to this problem. Ensuring, through the Energy Bill, that we have more competition is part of the story, but would that not be reinforced by strengthening the role of a single energy market to attract more investment and drive even more competition into the system?
Mr Davey
My hon. Friend is right. My right hon. Friend the Prime Minister has been pushing the case for the single energy market at the European Council. Recently, I hosted a meeting of energy Ministers from northern European countries—the northern European energy dialogue—to consider ways to have better interconnections in the northern European grid, which will encourage downward pressure on prices.
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael
Mr Davey
We are doing a number of things, working with the Health and Safety Executive and the industry. Only last week I held a meeting in my office with a range of people from the industry and with key players to see what progress has been made since that tragedy and what more we can do. It is clear that there is no room for complacency, although there has been a great deal of progress.
Neil Carmichael (Stroud) (Con)
What steps is the Minister taking to promote the development of energy storage systems, notably liquid air, which would be a good solution to our energy problems in the future?
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael(11 years, 10 months ago)
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Mr Davey
The hon. Lady raises an important issue, and it is one that many hon. Members have experienced in their constituencies. In the past, people who are off the gas grid have not had the support they deserve, but the Minister of State, my hon. Friend the Member for South Holland and The Deepings is looking into the matter. We are looking at tackling fuel poverty through mechanisms such as collective switching, for example, and at renewable heat, which can really help people who are off grid. We are looking across the range of our policies to see whether we can help.
Neil Carmichael (Stroud) (Con)
T2. In my Stroud constituency, we have a large number of innovative energy firms eager to pursue research and development projects. One area I think worth developing is energy storage, particularly storing electricity, which answers quite a few questions about engineering and providing an industrial base, as well as the peak problem in relation to renewable energy. What measures will the Government take to encourage investment in energy storage?
Mr Davey
My hon. Friend is absolutely right. I think energy storage technology holds out massive potential for the future, and UK firms are at the cutting edge of some of these technologies. When we finalised the Energy Bill, we said that we were minded to run a capacity market next year. One thing we would do with that is to have an early capacity market auction for demand-side response and storage technologies. That would send a very clear signal to these innovators.
Energy Bill
Debate between Ed Davey and Neil Carmichael(12 years, 1 month ago)
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Mr Davey
My hon. Friend makes an interesting point. National Grid will have the job of setting the first stage of the electricity market reform delivery plan, and I will give it guidelines, as agreed with the Chancellor, on how it should set that plan. We will make it clear that it must consider power sector decarbonisation even ahead of the target that will be set in 2016.
It is worth reminding the House that the renewables energy target for 2020 was set in 2008, some 12 years ahead of the target date. If we set a decarbonisation target for 2030 in 2016, that will be a full 14 years ahead of its target date. It is therefore clear that we are planning for the longer term and that we have logic on our side. It would have been great if the Opposition could say that they had argued for this before, but they did not. I am glad they are joining us now.
The Bill’s central objective is to achieve electricity market reform, with a new investment mechanism at its core: the feed-in tariff with contracts for difference. Contracts for difference will provide long-term electricity price stability, and therefore revenue certainty, to developers and investors in technologies such as carbon capture and storage, renewables and nuclear.
Neil Carmichael (Stroud) (Con)
The Bill’s measures will provide clarity and certainty for investors wishing to develop infrastructure. Does the Secretary of State agree that that is imperative in delivering the model he is talking about?
Mr Davey
My hon. Friend has great expertise in this area, and I entirely agree with what he says. Revenue certainty will reduce investment risk, and it should therefore also reduce the cost of financing—the cost of capital. That is far more important for low-carbon technologies than for fossil fuels, because so much of the cost of renewables and nuclear is the set-up capital cost. Our electricity market reform is, essentially, shaping a new low-carbon market, in order to stimulate the energy investment Britain needs.
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Davey
I do agree that investment in onshore wind is a serious matter. We need to ensure that industry and investors know that the Government are committed to a long-term, stable and consistent framework. The hon. Gentleman will know that I lead on renewable energy strategy and I decide the policy, and the industry has heard that.
Neil Carmichael (Stroud) (Con)
I, too, welcome Hitachi’s expression of confidence in our nuclear industry, especially as the plans include Gloucestershire. What does the Minister think about the need to develop skills and the labour market to support that infrastructure?
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael
Neil Carmichael (Stroud) (Con)
17. What assessment he has made of the likely implications for his Department’s energy policy on the green investment bank.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The UK green investment bank policy is one of a number of policies that together will support the Government’s green and growth objectives. The bank, funded with £3 billion over the three years to 2015, will tackle gaps in the financing of green infrastructure projects. It will operate to a “double bottom line” of both achieving green impact and making positive financial returns. The initial priority sectors for the bank are offshore wind, waste and recycling, energy from waste, non-domestic energy efficiency, and support for the green deal.
Neil Carmichael
Does the Secretary of State agree that the green investment bank is emblematic of the Government’s determination to promote economic growth, and does he recognise the importance of ensuring that small and medium-sized enterprises are part of that story?
Neil Carmichael (Stroud) (Con)
Does the Minister welcome the news that nearly a third of the 900,000 new jobs have come into the green economy, which is obviously underlined by the excellent news that Sharp is moving to this country from Germany?
Oral Answers to Questions
Debate between Ed Davey and Neil Carmichael(13 years, 10 months ago)
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Neil Carmichael (Stroud) (Con)
20. What progress he has made on the implementation of his proposals for a groceries code adjudicator.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
The groceries code adjudicator Bill is being drafted. I had hoped to publish it before Easter, but now I expect that publication will happen soon after Easter.
Neil Carmichael
I thank the Minister for that encouraging reply. Farmers in my constituency are very anxious to see the introduction of an adjudicator. Will it have sufficient powers to impose financial penalties if there is persistent avoidance of the code of practice?
Mr Davey
When we publish the Bill, the hon. Gentleman will see that we wish to have a reserve power for the adjudicator on penalties, but there is also a real case to be made for the adverse publicity that large supermarkets would face if they breached the groceries supply code of practice.